Bulletin

Plastic maker Metabolix going public

Archer Daniels Midland to buy $7.5 mln in stock

By

SteveGelsi

NEW YORK (MarketWatch) -- Metabolix on Friday filed to raise up to $86 million in an initial public offering as the biotech firm teams up with agricultural giant Archer Daniels Midland to produce biodegradable plastic.

Archer Daniels Midland
ADM, +1.70%
a partner with the firm and an investor, has agreed to purchase $7.5 million of stock in the company in a private placement.

Metabolix is working with Archer Daniels to build a 50,000-ton annual capacity commercial scale plant to produce biodegradable plastics out of corn sugar to compete with existing petroleum-based plastics.

Meabolix currently produces about 10 tons a month of plastics jointly with ADM at a pilot plant.

Metabolix specializes in genetically-engineered, proprietary microbes that help convert fermented corn into a polyhydroxyalkanoates, used to make plastic. It also hopes to develop a similar product from switch grass.

"We intend to sell these polymers as environmentally friendly, but functionally equivalent alternatives to petrochemical-based plastics in a wide range of commercial applications, including disposable goods, packaging, agricultural products, consumer goods and electronics," Metabolix said in a note to clients.

The company owns 320 issued patents and 100 patent applications world wide, and it has licensed approximately 60 issued patents and over 30 patent applications world wide.

The company reported a net loss of $7.6 million in 2005 on revenue of $2.8 million, compared to a loss of $5.1 million, on revenue of $3.7 million in 2004. As of March 31, its deficit accumulated from inception was $50.5 million and total stockholders' deficit was $46.8 million.

Metabolix employs 43 people full-time, including 31 scientists specializing in PHA natural plastics production in microbial fermentation and plant technologies.

James J. Barber, 52, has served as our chief executive officer and as a director since joining Metabolix in 2000.

Prior to joining Metabolix Barber was the global business director for the organometallics and catalysts business of Albemarle Corp.

In its risks section, Metabolix said it may not be able to successfully manufacture natural plastics at a commercial scale in a timely or economical manner; it also faces possible legal challenges to its patents. Its polymer-producing microbes may be produced by genetically engineered crops, which are prohibited or limited on some countries.

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